Midrange Travel Choices Expanding in Asia

Days before booking two weeks of temple-hopping in Vietnam and Cambodia last year, Karisa Kopaczewski and three of her friends came up with a twist. Let’s try to find a beach for a couple of days and go home from there, they decided.

A self-proclaimed Type-A traveler and no fan of last-minute changes, Ms. Kopaczewski hit the Internet. She quickly found a $30 one-way flight from Vietnam to the Malaysian island of Langkawi and a mid-range resort on sandy, palm tree-lined beach for $134 a night.

“Costs were so reasonable we decided, why not?” said Ms. Kopaczewski, 32, an attorney based in Atlanta who writes a blog called Flirting With the Globe. “That wouldn’t have happened a few years ago.”

Travelers like Ms. Kopaczewski and her friends are finding a much different travel experience in Asia, a region that has been known for extravagant five-star resorts and super-cheap one- or two- star choices — but little in between. Even as the region’s luxury travel options continue to expand, companies around the world are racing to provide more midmarket choices, whether new hotels or the car- sharing service Uber battling it out with tuk tuk drivers and taxis.

Asia’s midrange travel industry is in the midst of a “dramatic transformation,” said Douglas Quinby, vice president of research for PhoCusWright, a travel industry consulting company. “It’s still a very early market, very young.”

Helping to fuel the expansion is a new generation of travelers, especially those from mainland China, who are quickly becoming one of the world’s largest groups of tourists. (The China National Tourism Administration recorded more than 107 million outbound trips in 2014, a 19.5 percent increase from 2013.)

In China, “not only rich people are doing it,” said Melissa Yang, co-founder of Tujia, a company based in Beijing that hopes to become the AirBnB of China. “A lot of people are traveling for the first or second time.”

Across the region, the increasing competition is creating more choices and more deals for travelers.

Hannah and Adam Lukaszewicz, veteran budget travelers based in Chiang Mai, Thailand, were surprised at the choices when they decided to book a trip to Angkor Wat, Cambodia, a few months ago. They found a new boutique hotel near the Cambodian temple that offered a swimming pool, air-conditioning, cable TV and private bathroom for the equivalent of $25 a night.

“There are way more affordable hotels” in Asia than a few years ago, Ms. Lukaszewicz said. “We actually don’t stay in hostels at all in Asia, because you can get a three-star hotel for 20 bucks.”

The Lukaszewiczs, who write about their travels on GettingStamped.com, regularly take advantage of the new low-cost airlines flying in and out of Chiang Mai. A connection to Bangkok is typically about 970 Thai baht, or about $30. “Sometimes it can be cheaper than taking the overnight trains and buses,” Ms. Lukaszewicz said.

The number of passengers flying on smaller carriers in Asia has doubled since 2010, reaching 400 million a year, and is expected to reach 600 million by 2018, according to data compiled by Euromonitor. The growth has “opened up a lot of destinations,” said Bill Barrett, managing director of C9 Hotelworks, a Thailand- based hotel industry consulting firm. “It’s easier to jump around.”

Fares are also dropping, as both smaller carriers and large airlines look for new ways to lure passengers. In February, for example, AirAsia introduced its Asean Travel Pass, offering as many as 10 one-way flights in a 30-day period for about $160.

At the same time, international hoteliers are rapidly expanding in the region. One growth area: so-called “poshtels,” upscale hostels offering simple dorms and private rooms in stylish surroundings, catering to thrifty travelers who still like high-thread-count sheets. The Singapore-based Radiance Hospitality Group and Lub D, in Bangkok, are among the companies expanding their poshtel offerings. “There’s a lot of innovation in the economy space,” Mr. Barrett said.

And familiar Western brands such as Intercontinental and the Accor Group, which includes the Ibis brand, have all announced aggressive expansion plans.

Asia is also the fastest growing region for online vacation home listing services such as AirBnB and HomeAway. In Singapore, the AirBnB listings rose to 2,100 homes in 2014, a 260 percent increase over the previous year; in Japan the number quadrupled, to 5,600 listings. “In Tokyo demand is almost outstripping supply,” said Nate Blecharczyk, AirBnB’s co-founder and chief technology officer.

However, the services also are creating controversy. Faced with a wave of homes advertised online for vacation rentals, many cities, including Singapore, are considering new regulations to restrict the practice. “This is a new concept, wherever you go,” Mr. Blecharczyk said. “I expect cities to follow the same trajectory as in Europe or the U.S.”

In China, several cities, including Beijing, have moved to ban Uber. Yet investment and, ultimately, more growth in such operations is continuing.

Many travelers and travel experts also note that arranging trips has become a lot easier as more businesses in Asia adapt to life on the Internet and the websites of midrange and smaller businesses improve.

“Online systems and Web-only fares are new to Asia,” said Mimi Cassidy, co- owner of Moraga Travel, a travel agency in northern California. In the past she often relied on tour operators or regional contacts. But now the Internet “is something I always check.”

The fact that so many in Asia are focused on their mobile devices also has prompted travel companies to use Facebook, Twitter and other social media platforms to announce special prices and promotions, something that helps potential travelers elsewhere in the world. “That’s where the best deals are coming from,” Mr. Barrett said.

For the Lukaszewiczs, who have more than 22,000 followers on Twitter, they say that all the changes have been readily apparent in their recent travels: ATMs available on remote islands and the online availability of an $18 room in the municipality of El Nido, in the Philippines’ Palawan Islands.

“Even the mom-and-pop hotel with four rooms is now on Agoda,” the online service, Ms. Lukaszewicz said. “It wasn’t there last year.”